All posts tagged Barclays

As if there isn’t enough to fret about in the new-home market, home builders have provided investors with another concern: the potential for declining profit margins.

Roughly half way through earnings season for home builders, margins have become the new focal point of investor angst. The concern is that builders’ profit margins might start to dwindle as early as next year if, as many expect, price appreciation for new homes loses more momentum than the rising cost of building homes.

Such jitters can reverberate for investors because the home-building industry is quite cyclical. Investors constantly scan for the latest sign that the market is gaining steam, plateauing or starting to decline. Read More »

A troubled Cincinnati-area mall has taken the dark distinction of causing the first loss to a commercial mortgage-backed security that earned a gilt-edged AAA rating as the real-estate boom was maturing in 2005.

The recent sale of the mortgage on the Tri-County Mall for $31.6 million fell far short of the $135.2 million remaining balance on the CMBS loan, according to CMBS analysts including Roger Lehman at Credit Suisse and Keerthi Raghavan at Barclays. The sale led to a $123.7 million loss to a Credit Suisse-issued CMBS after payment of accumulated costs, wiping out $5.7 million of formerly AAA-rated debt after full write-downs on some lower-rated debt, they said. The mortgage was purchased by New York-based SDG Investment Fund, according to the broker, Mission Capital Advisors, which received five final offers for the property out of 20 initial bids.

The housing market has Barclays analyst Stephen Kim remembering his first car.

In one of the more interesting analyst notes that has crossed our desks in recent months, Mr. Kim, 44, compares the housing market to his old vehicle, a brown 1972 Oldsmobile station wagon (it looked something like this, he says).

This walk—or drive—down memory lane came as Mr. Kim upgraded his view on the sector to positive, from neutral. He predicts that home prices, which spent several years in a downward spiral, will climb 10% in 2013 and 8% in 2014. Read More »

Commercial mortgage bonds issued since the financial crisis have been held up as models for how securitized debt should look.

But signs of stress are already starting to show up, surprising even to analysts who have been warning that loans aren’t as conservative as they were when the market began its recovery in late 2009. Read More »

Six years after the housing market started its monumental collapse, builders are finally starting to see their spirits come out of the dumps.

The National Association of Home Builders said Tuesday its housing market index jumped to 35 this month, the highest level since March 2007 and up six points from a month earlier. It was the largest monthly increase since September 2002.

The reading may indicate that the beleaguered sector has finally turned a corner. What’s more the index seems to show improving health in the nation’s smaller players, whose recovery has lagged their bigger and better capitalized peers. Read More »

In the high-stakes game to buy apartment giant Archstone, Sam Zell is throwing curveballs.

When the real estate bigwig announced late Friday night that his company Equity Residential, the nation’s largest apartment landlord, had a deal to buy 26.5% of Archstone, suddenly the resolution of one of the largest and most complex commercial real estate deals on the market got a little more confusing. Why would Mr. Zell want only a quarter of the company? Doesn’t this deal just add another owner to the mix, and further complicate things?

The answer, for the time being, is yes, this initial deal does, in fact, make things hairier. But if you believe Mr. Zell, the ultimate plan is to buy all of Archstone, and by launching the acquisition in stages, the goal is to get the better of Lehman Brothers by blocking the failed investment bank’s right to match the offer. Lehman, under its ownership agreement with the banks, has the right to match any offer from an outside investor to buy a stake in Archstone, so Mr. Zell figures that by buying a smaller chunk, he is able to offer a proportionally higher price for the company that Lehman would be unable to match. Read More »